Defendant’s Failure to Meet Second and Third Requirements of the Doctrine of Res Judicata Allows Plaintiff to Proceed with Small Claims Lawsuit involving Demolition
In Indian Harbor Insurance Company v. MMT Demolition Inc., Developing Environments retained MMT Demolition to demolish a property and remove its debris. MMT Demolition obtained the necessary permits from the City of Chicago to demolish the property and the demolition occurred. The front wall of a neighboring property was attached by an interlocking running board to the front wall of the subject property. In order to demolish the neighboring property, MMT Demolition was required to address the issue of the front walls of both buildings. Indian Harbor Insurance alleges that despite the front walls being attached, MMT Demolition at no time ever isolated the two buildings or cut the roof trusses of the neighboring property away from the walls of the subject property. Instead, MMT Demolition, pushed, and pulled the entire roof framing in order to separate it from the subject property. This action caused vertical cracks though the masonry walls of the structure of the subject property, rendered doors and windows inoperable, left the front wall of the subject property unable to resist any structural loads, comprised the structural integrity, and rendered the entire building uninhabitable.
The court reviewed whether a small claims lawsuit brought by a tenant of the subject property presented an identity of causes of action sufficient to invoke the doctrine of res judicata and bar plaintiff’s lawsuit.
Under Illinois law, the first requirement of res judicata is a final decision on the merits. A final judgment is a determination of the issues presented which ascertains and fixes absolutely and finally the rights of the parties. The second requirement of res judicata is an identity of the causes of action. Our Illinois Supreme Court has recognized the validity of the transactional test to determine whether there is an identity of the causes of action. Under the transactional test, a court examines the causes of action in “factual terms,” which are considered coterminous with the transaction, regardless of the number of substantive theories, or variant forms of relief flowing from those theories, that may be available to the plaintiff, and regardless of the variations in the evidence needed to support the theories or rights. To determine whether there is an identity of the causes of action between the first and second lawsuit, courts must examine the facts that give rise to the plaintiff’s right to relief, not simply the facts which support the judgment in the first action. The third requirement of res judicata is an identity of parties, or their privies. For purposes of res judicata, privity is said to exist between parties who adequately represent the same legal interests.
The court determined that Indian Harbor Insurance could not have adequately pursued its cause of action during the pendency of the tenant lawsuit in a small claims court, and it was not in privity with the tenants. Since MMT Demolition cannot meet the second and third requirements of res judicata, Indian Harbor Insurance’s lawsuit must be allowed to proceed.
Indian Harbor Ins. Co. v. MMT Demolition, Inc., 2014 IL App (1st) 131734.
